There are listed options CAIOA with a strike price of 30¢ expiring September 2024. If the SP is 40¢ I can exercise the options I hold to acquire shares by paying the 30¢. If the share price does not equal or exceed 30¢ by the expiry date they expire worthless.
Thoughts about 2024 for CAI....
CAI has been somewhat accident prone over the last 18 months, hence the very poor sentiment. Starting with the projections of the DFS (definitive feasibility study) for the expected grade not being met, then Covid, then hard to get the correct number of personnel, then a stuff up with supplying water to the mill, inflation torpedoing the cost base which created all sorts of problems with paying down debt and last but not least the hedges are well out the money.
So long as nothing else goes wrong, my thoughts are CAI is now a turnaround stock. Grades delivered to the mill are set to improve by about 30% on the last 12 months (makes a huge difference), CAI is now a 2 mine company (which improves the chances institutions will take up a position) and there is a visible path to achieving the projections set out in the DFS.
All that management has to do is make good on the expectations they have created and the SP will follow... imo. As to where the SP will end up it is anybody's guess. Sentiment can play a bigger part than an objective valuation.
The March 1/4ly is the one I will pay a lot of attention to. I will be looking to see a big improvement in the cash held by the company over the next 3 months. That number doesn't lie and if the cash pile is visibly growing the SP should respond.
CAI Price at posting:
20.0¢ Sentiment: Buy Disclosure: Held
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